DTN Oil Update
Oil Extends Rise on US-China Trade Talks
VIENNA (DTN) -- Oil futures were on track for the fourth consecutive daily gain Tuesday morning following the resumption of China-U.S. trade talks. On Friday, U.S. President Donald Trump and Chinese President Xi Jinping talked directly for the first time since President Trump took office, which was followed by representatives from both countries meeting in London on Monday. The meetings continue Tuesday.
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NYMEX-traded WTI for July delivery was up $0.19 barrel (bbl) to trade near $65.48 bbl, and ICE Brent for August delivery rose $0.24 bbl to $67.28 bbl.
July RBOB gasoline futures were up $0.0057 to $2.1009 gallon, and the front-month ULSD futures contract gained $0.0040 to trade near $2.1504 gallon.
The U.S. Dollar Index softened by 0.026 points to 98.880.
The two parties continued negotiations Tuesday, sparking hopes of easing trade tensions. Demand growth expectations were already modest prior to the tariff escalation, fueling fears of global oversupply, particularly in light of OPEC being seemingly committed to output increases. The trade-prohibitive 145% additional tariff on Chinese imports to the U.S. instituted in April exacerbated these fears and accelerated the decline in oil prices.
Next, market participants are awaiting the U.S. Energy Information Administration's monthly short-term energy outlook for June, scheduled for 12 p.m. EDT release. Given recent tariff suspensions, macroeconomic and demand growth forecasts will likely be subject to revisions and a higher degree of uncertainty.